SGI renders 400 redundant

Silicon Graphics Inc. (SGI) wants to return to profitability and thinks a ten per cent cut in its workforce can help.

Listed under "Today's Highlights" on the SGI Web site Thursday was the announcement that 400 workers would lose their jobs. As a result, SGI will trim quarterly expenses by close to $10 million, starting with its first fiscal quarter of 2004.

SGI will take a charge of $15 t0 $20 million in its fourth fiscal quarter of 03, ending June 27.

For some time now, SGI has been happy to stay in its niche, selling high-end servers and workstations used for computation-intensive tasks. The company has started to sell Itanium 2-based servers alongside its MIPS/IRIX hardware but has not seen incredible demand for either offering.

A rise in government contracts as a results of increased defense spending has not done enough to bring SGI back into the black. And so SGI turned to job cuts as a way to lower the bottom line.

"Our intent is to bring expenses in line with revenues," SGI's CEO Bob Bishop, said in a statement. ®